Apple Denied Last Minute Extension in Epic Case

U.S. District Court Judge Thomas S. Hixson on Friday accused Apple of purposefully misleading the court and trying to stall its compliance requirements in the Epic v. Apple antitrust case.

As you may recall, Epic sued Apple and Google separately for the same crimes: Each maintains a monopoly with their respective mobile platforms, forcing app developers to distribute apps exclusively through their online stores and using their payment systems, both of which incur arbitrarily high fees. Though Epic handily defeated Google, its victory against Apple was more limited because of a lack of evidence: Apple was required to let developers use competing in-app payment systems, a major victory, but the Judge noted that “Epic failed in its burden to demonstrate Apple is an illegal monopolist.”

That was three years ago, and Apple has still not complied with the ruling.

In the years since, Apple and Epic both appealed the ruling, both lost those appeals, and the U.S. Supreme Court declined to hear the case. With its legal challenges expired, Apple then engaged in a strategy that’s since become well known thanks to similar shenanigans it’s employed in the EU: It claimed to be complying with the ruling while doing anything but. In this case, it announced in January 2024 that developers which took advantage of third-party in-app payment systems were still required to pay Apple massive fees–27 percent of 12 percent, depending on the nature of the purchase–to ensure that those transactions would be much more expensive than just using Apple’s system. Epic sued Apple for this “bad-faith” compliance, garnering the support of Microsoft and others in the industry that have suffered from Apple’s policies.

Concurrent to this, Apple has honed its malicious compliance strategy by not meeting its legal requirements under the EU’s Digital Markets Act (DMA). Epic played a role in that episode, too, by attempting to ship a mobile app store of its own on Apple’s platforms. Apple postponed the inevitable, restoring Epic’s developer account, terminating it again arbitrarily, restoring it yet again following a European Commission investigation, rejecting two Epic Games Store app submissions, and then quietly relenting, allowing Epic to finally deliver its app store months later. Apple is wrestling with the EU, though a European Commission investigation found that Apple is not complying with the DMA.

Back in the U.S., Judge Yvonne Gonzalez Rogers told Apple on May 31 that it was required to produce all the internal documents it had related to its January change to the App Store rules, and that it must do so by September 30. Since then, Judge Hixson has overseen this document collection phase of the case, with Apple and Epic both producing status reports every two weeks to ensure progress was made. On Thursday, Apple submitted what should have been its final progress report. And in it, the company asked for a one-month extension.

Judge Hixon was apoplectic.

“Yesterday – four days before the deadline for substantial completion – Apple disclosed that the number of documents it needs to review is about twice the estimate it previously provided to the Court,” he wrote in a ruling in the matter. “Apple requests a fifteen day extension of time to substantially complete its document production, and Apple says it will complete its document production by October 31, 2024. The Court denies the request.”

As Hixon notes, Apple would have known how many documents it needed to review months ago. This means that the company’s progress reports were bogus, he says, and that Apple had planned all along that it would never meet this deadline, keeping it a secret from the Court. This is “planned non-compliance,” he wrote, and “bad behavior.”

“It is simply not believable that Apple learned of this information only in the two weeks following the last status report,” he concluded.

“Apple is one of the largest companies in the world, with nearly infinite resources available to it,” he added. “If Apple really wanted to, could it collect and review 1.3 million documents between August 8 (the date of the Court’s order) and September 30 (the deadline for substantial completion)? Yes, of course it could. If Apple really wanted to, with all of the resources available to it, it could probably review that many documents in a weekend.”

Which led Judge Hixon to consider why Apple was stalling. Here, he agrees with Epic.

“As Epic constantly points out, this document production is all downside for Apple because it relates to Apple’s alleged lack of compliance with the Court’s injunction,” he wrote. “It is not in Apple’s interest to do any of this quickly. This is a classic moral hazard, and the way Apple announced out of the blue four days before the substantial completion deadline that it would not make that deadline because of a document count that it had surely been aware of for weeks hardly creates the impression that Apple is behaving responsibly.”

In short, the stalling is over. Apple still has to meet its legal requirements in this case by tomorrow, September 30.